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NZDUSD weekly and daily recap, 26th May 2011

Forex Commentary:

The euro hit a record low versus the Swiss franc on Thursday on mounting doubts whether Greece will receive its next round of aid from the IMF, and the worries are likely to keep the single currency under pressure.

Against the dollar, the euro rose 0.3 percent to $1.4143. It earlier rose to $1.42069 after an article in the Financial Times quoted the chief of the European Financial Stability Facility as saying China was “clearly interested” in buying bonds for the Portugal bailout to be issued in mid-June.

Against the yen, the U.S. dollar on Thursday fell 0.8 percent to 81.30 yen after hitting a session low of 81.15, hurt by disappointing U.S. economic data

Trading Setups / Chart in Focus:

NZDUSD

In our members’ commentary from May 20th we discussed a bullish weekly fakey setup that formed as last week came to an end. Yesterday, a bullish inside pin bar setup formed on the daily NZDUSD chart, so we had a weekly price action setup supporting a bullish bias already, yesterday’s inside pin bar then fired off to the upside today with force.

This is a great example of how to use the higher time frame bias to add confluence to a lower time frame price action trading setup.

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Note that price hit a high of 0.8122 today, in our members’ commentary from May 20th we stated, “The NZDUSD weekly chart formed a fakey this week that is showing rejection of the 21 week EMA and horizontal support through 0.7750-0.7800. If price can break above this week’s high next week, we could see a re-test of the resistance near 0.8120.”

Note the inside pin bar setup on the daily chart below that provided us with a trigger entry which was in-line with the previous bullish bias on the weekly as discussed above.

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For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my Forex trading course.

Other Markets:

On Wall Street today U.S. stocks rose for a second day in what was a choppy trading session. Technology and consumer discretionary stocks led the way on the back of upbeat earning reports.

The Dow added 8.10 points, or 0.07 percent, the S&P 500 gained 5.22 points, or 0.40 percent, and the Nasdaq added 21.54 points, or 0.78 percent.

Upcoming important economic announcements: 5/27/2011

2:00am EST: Britain – Nationwide HPI m/m
5:30am EST: Switzerland – KOF Economic Barometer
10:00am EST: United States – Pending Home Sales m/m